Wal-Mart's CEO to allocate more capital to its key markets India & China

The retailer will look to strengthen its store presence along with technological capabilities outside of the USVarun Jain | ETRetail | April 21, 2017, 14:31 IST

World's biggest retailer Wal-Mart Stores' president and chief executive Doug McMillon said that India is a key growth market for the company, along with China, and it will focus on allocating capital to these markets in a bid to grow business profitably.

"In order to grow our business profitably, we’re making strategic choices to simplify our portfolio and be more focused. For example, we’ve sold non-core assets like shopping malls in Chile and the Suburbia clothing chain in Mexico. Our emphasis for capital allocation is on our core North American markets (Mexico & Canada) and key growth markets (China & India). We are intentionally focused on investing in markets, channels, and formats that position us to win," the top executive said in Wal-Mart's annual report for 2017.

According to the report, Wal-Mart will focus on investing in its core business with store remodels, technology and customer initiatives like online grocery and pickup, while at the same time being open to divest non-core assets if it’s in the company's best interest.

Walmart India – a wholly-owned subsidiary of US-based Walmart Stores currently operates 20 stores in the cash-and-carry wholesale space under the Best Price banner across the country and plans to take this number to 50 by 2021.According to reports the India subsidiary is evaluating foreign direct investment (FDI) guidelines for the food retail space in India as the government has permitted 100 per cent FDI in the sector.

In China the retailer operates 424 retail outlets along with 15 wholesale stores according to the company.The company in its annual report said that it will focus more on growing through e-commerce route and will shy away from expanding its offline presence in the US market.

"We will focus on growing more through e-commerce and comp sales in our current store fleet and rely less on new store growth in the U.S.," said McMillon.

"We were founded on an everyday low-cost mentality but we think we have opportunities to work in new ways and find a path to a lower cost base. This is vital for our future. We’ll be smart with how we allocate capital to drive long-term value for our shareholders. We’re after efficient growth," he said further.

Meanwhile the retailer will look to strengthen its store presence along with technological capabilities outside of the US."We’ll continue to strengthen our stores around the world, we’ll continue to build our e-commerce and digital capabilities, and we’ll put them together in a way that saves customers time and money," said McMillon.